Before you can decide on whether to manage a property yourself or instruct an agency to look after it for you, it is important to have a solid understanding of what is required of you as a NEW landlord.
How much income will my property generate?
Calculate how much income your property will generate. Researching how much rent you can achieve is a great place to start. Looking at the figures, you need to cover your mortgage payments, enough for maintenance, insurance and tax, while still making a profit. It is worth researching rental properties on the property portals (eg: On the Market and Rightmove) to gain an understanding of what similar homes achieve in your area. We recommend talking to a local lettings agent who will carry out a valuation for you.
You will need to keep your mortgage lender up to date with your intentions. Informing them that there will be someone other than yourself living there. If you don't inform your mortgage lender, you will be open to harsh penalties. Mortgage lenders have ways of knowing if a property has gone up on the rental market.
Legislation and Regulations
Compliance is very important when being a landlord, your ultimate responsibility is to provide a safe home for your tenants. Knowing the regulations and legislation of letting a property will help you succeed in doing that. Regulations include: gas, fire, electric (EICR), energy performance (EPCs) as well as Tenancy Deposit Protection. Under the new rules, landlords must check whether a prospective tenant can legally rent a property in the UK. Understanding the eviction notices is crucial (Section 21 and Section 8 Notices). Most letting agents will be able to organise this for you and guide you through the process.
Speak to a Lettings Agent
Letting agents can be a great resource for new landlords. Not only should they be up-to-date with all lettings regulations but they can also advise you on rents in the current rental market as well as presenting your property to give it the best chance of letting quickly to good tenants. It is in the agents best interest to have your property rented out to good tenants and they'll want to inform you of the best way of achieving this.
Purchase Landlord's Insurance
Standard home insurance is not designed for rental properties so your current policy will differ from that of a landlord's insurance. Purchasing landlords insurance maybe more expensive than the normal household insurance but it will ensure you are fully protected as a landlord.
Obtain tax advice
When you begin renting out your property, you should inform HMRC as tax may be payable on your rental income. Failing to do this could result in a tax penalty and if left too late, the tax bill for your rental property could be a nasty surprise. If you inform HMRC from the start, it will give you time to save up for any tax bill, record outgoings and work out how you are going to submit your tax return.